Sign Up to Receive an Email Alert when Technical Talk is Updated
Although we disagree with the idea that "the tape tells all," it is important for all traders to stay on top of key technical happenings on the charts. Below is our current "executive summary" take on the State of the Tape.
Technical Talk: April 20, 2011
Our Current Take:
Although today's session has an up-up-and-away feel to it, we need to keep a few things in mind. First, this morning's blast was undoubtedly driven by some short-covering. Next, there is now a gap on the S&P daily chart at 1320 (down to 1312.70). And finally, there is important resistance overhead at 1340. So, for those looking to establish long positions, you might be best suited to wait for a breakout above 1343, a closing of the gap, or a retest of the 1300 area. Bottom line: We're in a trading range at the moment.
We would consider being short-term buyers at: A filling of the gap down to 1312 or a break over 1343 on the S&P 500
We would consider being short-term sellers at: A close below 1305 on the S&P 500
Trend and Momentum Indicators:
Short-Term Trend: The short-term trend has to be upgraded this morning, but the question is how far? With the 5dma below the 10dma, the 10dma below the 18dma, and resistance overhead, we're going to go with high neutral or moderately positive for now. In short, the bulls have some work to do yet.
Intermediate-Term Trend: Although it is nice to see green on the screens, this morning's blast higher doesn't really change much. We'll call the intermediate-term trend moderately positive.
Market Internals: Not surprisingly, both of our TBC models have flipped to positive. So, unless the market reverses course instantly again, these indicators tell us to look for decent gains over the next week.
- TBC = Trend-and-Breadth-Confirm Model
Market Momentum: Our momentum models are definitely not "hair-trigger" oriented. As such, the bulls will need to show some muscle before these indicators give an all-clear signal.
Support/Resistance Zones for S&P 500:
- Current Support: 1300-1310
- Current Resistance: 1343
Early Warning Indicators:
Overbought/Oversold Condition: The indices are quickly becoming overbought from a short-term perspective. However, there is clearly some room to run here.
Investor Sentiment: No change today. Our sentiment indicators remain modestly negative on balance.
Chart Watch:
Below are snapshots of the two main charts we watch closely each day from a technical perspective. The indicators we display on the charts below include: 50 day weighted ma (purple), 18 day weithged ma (cyan), 10 day weighted ma offset by 2 days (orange), 4 day weighted ma offset 2 periods (dashed blue) and stochastic %K using 14 and %D.
S&P 500:
NASDAQ Composite
The analysis and information in this report and on our website is for informational purposes only. No part of the material presented in this report or on our websites is intended as an investment recommendation or investment advice. Neither the information nor any opinion expressed nor any Portfolio constitutes a solicitation to purchase or sell securities or any investment program. The opinions and forecasts expressed are those of the editors of TopStockPortfolios and may not actually come to pass. The opinions and viewpoints regarding the future of the markets should not be construed as recommendations of any specific security nor specific investment advice. Stocks should always consult an investment professional before making any investment.
Any investment decisions must in all cases be made by the reader or by his or her investment adviser. Do NOT ever purchase any security without doing sufficient research. There is no guarantee that the investment objectives outlined will actually come to pass. All opinions expressed herein are subject to change without notice. Neither the editor, employees, nor any of their affiliates shall have any liability for any loss sustained by anyone who has relied on the information provided.
The analysis provided is based on both technical and fundamental research and is provided “as is” without warranty of any kind, either expressed or implied. Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.
The information contained in our websites and TopStockPortfolios publications is provided by Ridge Publishing Co. Inc. (Ridge). One of the principals of Ridge, Mr. David Moenning, is also President and majority shareholder of Heritage Capital Management, Inc. (HCM) a Chicago-based money management firm. HCM is registered with the U.S. Securities and Exchange Commission as an investment adviser. HCM also serves as a sub-advisor to other investment advisory firms. Ridge is a publisher and has not registered as an investment adviser. Neither HCM nor Ridge is registered as a broker-dealer.
Employees and affiliates of HCM and Ridge may at times have positions in the securities referred to and may make purchases or sales of these securities while publications are in circulation. Editors will indicate whether they or HCM has a position in stocks or other securities mentioned in any publication. The disclosures will be accurate as of the time of publication and may change thereafter without notice.
Investments in equities carry an inherent element of risk including the potential for significant loss of principal. Past performance is not an indication of future results.
